LVMH PE firm invest in Flexjet: Here's what to know

Key Concepts:

• LVMH (Moët Hennessy Louis Vuitton)
• L Catterton (Private Equity Firm backed by LVMH)
• Flexjet (Private Jet Company)
• Fractional Leasing
• Jet Card Options
• Bonus Depreciation (Tax Break for Jet Buyers)
• Bespoke Cabins
• Private vs. Personal Jet Travel

LVMH's Investment in Flexjet

• LVMH is expanding into the private jet market through its private equity firm, L Catterton.
• L Catterton is leading an $800 million investment to acquire 20% of Flexjet.
• Flexjet, based in Cleveland, plans to use the investment to expand its fleet of large jets and infrastructure, particularly in Europe, where they are experiencing significant growth.
• LVMH's 75 brands will contribute to Flexjet's goal of providing a luxury experience and fostering a community of members.

Rationale Behind the Investment

• Flexjet Chairman Ken Rickey stated that L Catterton approached them with ideas about the future of luxury.
• LVMH and L Catterton believe that "the luxury of the future is time," which can be recouped through private travel.
• "They presented us some ideas about where LVMH and L Catterton see the future of luxury, and they basically see it around the luxury of the future is time, and they see that time, obviously in private travel where you can where you can recoup time." - Ken Rickey, Flexjet Chairman

Flexjet's Business Model and Performance

• Flexjet offers fractional leasing and jet card options.
• The company anticipates earnings of $425 million this year, an increase from $3.98 million last year.
• Flexjet has over 2000 members.

Impact of Congressional Spending Bill

• The private jet industry will benefit from the new congressional spending bill, which reinstates bonus depreciation.
• Bonus depreciation is a tax break for jet buyers.

Partnerships and Luxury Integration

• Flexjet already has partnerships with luxury brands owned by LVMH, such as Belmond (luxury hotel chain).
• They also partner with Bentley Motors and Ferretti (yacht company).
• Flexjet outfits special bespoke cabins in collaboration with Ferretti, creating a yacht-like experience in the air.
• One plane is designed to resemble the interior of a Bentley.
• Flexjet members receive special access to Belmond properties.
• The potential for a Louis Vuitton-themed plane was mentioned as a possibility.

Private vs. Personal Jet Travel

• The discussion introduces the distinction between "flying private" and "flying personal."
• "Personal" refers to owning your own plane.
• "Private" refers to using services like Flexjet, where you don't own the aircraft.
• The concept of "finding" or sharing private jet travel with others through WhatsApp groups is also mentioned.

Conclusion

LVMH's investment in Flexjet signifies a strategic move to capitalize on the growing demand for luxury travel experiences, particularly private aviation. The partnership aims to enhance Flexjet's offerings by integrating LVMH's luxury brands and providing exclusive benefits to its members. The investment is driven by the belief that time is the ultimate luxury, and private jet travel offers a means to save and optimize it. The distinction between private and personal jet travel highlights the different levels of luxury and exclusivity within the private aviation market.